Should you invest in stocks right now? (October 30, 2020)

*This is not financial advice, consult an advisor*

I can’t tell YOU what to do personally.

But I can tell you why I am NOT holding ANY stocks at the present moment.

Here we go, I’ll keep it short and sweet.

1) Insane Valuations

Here’s what happened in 2020, in a nutshell.

In March, EVERYTHING cratered.

And I mean everything.

It was 2 of the worst days in the history of the MARKETS (not just the stock market).

Then, we had one of the greatest stock market rallies in the history of mankind.

The NASDAQ (with a lot of tech stocks) outperformed everything else and actually traded ABOVE it’s ALL TIME HIGH (while the majority of the country remained impaired by COVID).

Just take a look at this graph, and tell me honestly if it represents how you feel the USA economy SHOULD be doing (considering what you see in your every day life).

Does it feel right?

Having a huge branch of the stock market HIGHER than it was at the beginning of the year, considering all that’s happened?

The short answer is a RESOUNDING NO.

I’m not denying that tech stocks have benefited from this pandemic, that actually makes sense.

The question is, how much more can they realistically go up??

ALL the money was POURED into tech, and rightfully so.

But I’m guessing that most of the benefits of a COVID economy are already priced in.

I mean look at this chart.

ZOOM is now worth more than EXXON…

I understand they are a great company with great timing, but these are CRAZY valuations and it’s probably a 50/50 shot at best whether these overextended tech companies can double in value AGAIN at this point.

2) Stocks will still go up, but I’m unsure how much in relative terms.

Here’s another crazy chart for you.

This is the S&P 500 (supposedly the best companies in the world) priced in GOLD.

That’s pretty crazy.

Basically what it shows is that regardless of what you are seeing in DOLLAR terms, in terms of GOLD (which holds its value much better) the stock market is actually on a serious DOWNTREND since 2019.

And this trend is only accelerating.

I would encourage you to go back and read my letter from yesterday about why I bought more Bitcoin recently, because when you start to price things in Bitcoin, the differences become even MORE extreme.

3) There are better things to do with your money.

For the record, I’m not saying that I don’t think stocks will continue to go up.

They will.

The Government has no choice but to print more money (see my previous letters).

That money printing will continue to pump up the stock market.

However, it doesn’t really matter.

Yes stocks will go up, but the dollars that it is valued in will go down, drastically.

PLUS, it’s very difficult at this point to pick stocks that have a great chance of doubling, because all companies that are “pandemic proof” are already at crazy valuations.

And companies like airlines or retail stores in malls are literally dead in the water and not coming back.

So what is a man or woman to do???

I keep on saying the same things, but hopefully it will sink in.

The only way to get an OUTSIZED return in this economy is to create OUTSIZED VALUE.

Ignore the stocks for a second and just think of the owners of the COMPANIES.

Zoom?

That dude is rich.

Netflix?

That dude is rich.

You get the idea, the people who own the COMPANIES end up making the real money, not necessarily the people who invest in them.

“But Kale, I can’t possibly invent a zoom or a Netflix…”

You don’t have to.

Zoom is worth more than Exxon mobile right now.

You don’t think they have the money to buy 2 dozen smaller companies for tens of millions of dollars each?

Of course they do.

All of the tech companies are going to be acquiring companies like CRAZY because they have so much cash, and no where to put it.

It’s going to be bananas.

Here’s a concrete example then I’ll let you go.

Google search the company “Thras.io”

They buy Amazon FBA Businesses and run them.

They are the QUICKEST company to a billion dollar valuation in history while remaining profitable.

Why not start an Amazon FBA business and then sell it off to Thras.io?

Do that once, then rinse and repeat?

It’s being done left and right by our students and people in our communities.

And then, once you have the cash, you can read this letter where I’ll tell you what I’m ACTUALLY investing in (hint, it starts with a B)

Kale

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